Decline of Canadian dollar to impact Vermont

Chelsea Ressler, manager of Second Time Around on Church Street in Burlington, arranges items for sale at her store on Thursday. The decline of the Canadian dollar has made shopping in Burlington more expensive for visitors from the north.(Photo: GLENN RUSSELL/FREE PRESS)Buy Photo

Story Highlights

Canadian dollar value slides compared to the U.S. currency

Burlington businesses brace for decline in Canadian tourism

Church Stree Marketplace plans to boost local marketing in anticipation of fewer Canadian tourists

Big-name brands in Burlington mall typically an attraction for tourists

The Canadian dollar is going down, which means talk of Canadians no longer heading south to American stores is going up.

"The minute the dollar drops people start talking about that," Marc Vallee said by phone Thursday afternoon from the pub he owns, Le Belvedere, less than 10 miles from the Vermont border in Bedford, Quebec. "We used to go to Burlington, St. Albans, because it's close to us. With the dollar going down, the value going down, people say they're going less."

That's bad news for businesses that count on tourist dollars from Quebec visitors. The Canadian dollar has been sliding in comparison to the U.S. dollar in recent weeks, attributed to a combination of plummeting oil prices and interest-rate cuts by Canadian banks. The Canadian "loonie," as the country's dollar is known colloquially, is hovering around 80 cents to the American dollar. That means Canadians crossing the border are essentially paying 20 percent more for U.S. goods than in recent years when the two forms of currency were nearly even.

"It's a big difference between your money and ours," Vallee said.

The Church Street Marketplace and the Burlington Town Center mall branching off from the downtown pedestrian shopping center are bracing for that potential decline in Canadian shoppers. "We have seen a slight drop-off in web traffic coming from Canada," said Erika Constantine, marketing director for the Burlington Town Center. She said the mall's website typically draws 25 to 40 percent of its traffic from Canada. Some of the mall's shopkeepers have reported reduced Canadian traffic in their stores in recent weeks, according to Constantine.

The Church Street Marketplace features more locally-owned shops than does the mall, which has big-name retailers such as Macy's and L.L. Bean. As a result, the Marketplace only receives 10 to 15 percent of its web traffic from Canada, according to marketing coordinator Jenny Morse.

"Those brands really pull people in," Ron Redmond, executive director of the Church Street Marketplace, said of the famous stores in the mall. Out-of-state shoppers then discover the locally-owned businesses that dominate the Marketplace, he said, and often make return visits to check out those shops and restaurants. Surveys since 2008 have shown that roughly 70 percent of Quebec shoppers on the Marketplace are return customers, according to Redmond.

"Being close to the border is great. There's no question about it," he said. Marketplace surveys have shown that the Quebecois who visit Burlington have a higher household income than the average household in the province or in its largest city, Montreal, which is less than two hours from Burlington.

““It’s capitalism. You just have to roll with it.””

Ron Redmond, executive director of Church Street Marketplace

That above-average status means the Marketplace should feel less impact from the shrinking Canadian dollar than it otherwise might, according to Redmond. "Our Quebecer has a little higher income," he said, "and that's been helpful to us."

Still, Redmond said the Marketplace is preparing for potential trouble from a declining Canadian dollar.

"You don't put all your eggs in one basket," he said, noting that the Marketplace is fortunate that its customers arrive in almost even numbers from Burlington, elsewhere in Vermont and out-of-state. The drop in the Canadian dollar will lead the Marketplace to market itself more aggressively in neighboring communities such as Williston, South Burlington and Essex, Redmond said.

Chelsea Ressler hasn't noticed a decline in Canadian business at Second Time Around, the clothing store she manages on Church Street. Her store bears a "Bienvenue Quebecois" sticker on the front window as do many shops on the street, and she estimates Second Time Around receives about 15 percent of its business from Canada.

Ressler knows how important Canadians are to the economy of Burlington. "They're definitely a presence that would be missed," she said.

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The Canadian dollar has declined against the U.S. dollar, making U.S. goods more expensive for Canadians.(Photo: GLENN RUSSELL/FREE PRESS)

The Church Street Marketplace, with its walkable, traffic-free, multi-block stretch of shops, counts on something many retailers don't offer — the experience, according to Becky Cassidy, marketing consultant for the Marketplace. She pointed to the "Winter Lights" event that starts Friday with new light installations, ice sculptures and shopping deals meant to draw visitors who might not otherwise head outside in northern Vermont in the dead of winter.

The mantra of the Marketplace is "Build it for locals and the tourists will come," Redmond said. "Your greatest potential is always right here."

The potential is also there for Americans to start streaming over the border into Quebec now that their money will go 20 percent farther in Canada. Vallee, the bar owner in Bedford, Quebec, said he expects to see more Americans coming into his town in the near future.

Redmond is bracing for that potential exodus of local shoppers as well. "It's capitalism," he said. "You just have to roll with it."